Massachusetts Pension Options A, B, and C: How They Really Work

Choosing between Massachusetts Pension Options A, B, or C is one of the most important retirement decisions Massachusetts public employees make.

Most people initially treat this choice as a math problem:

“Which option gives me the highest monthly pension?”

That’s a reasonable place to start, but it’s rarely the best way to make the decision.

In reality, most people want to protect their spouse and make sure household income continues if one person dies first. That’s why choosing a Massachusetts pension option is really about household goals, survivor protection, and long-term security, not just the size of the first check.

Understanding Massachusetts Pension Options A, B, and C

While details can vary slightly by retirement system, Massachusetts public employee pension options generally work the same way statewide.

Option A: Highest Monthly Pension, No Survivor Benefit

Massachusetts Pension Option A pays the highest monthly retirement allowance for life. When the retiree dies, the pension payments stop, and there is no ongoing survivor benefit.

Option A may make sense for:

• Single retirees

• Couples where the spouse has strong independent income

• Households that do not need pension income to continue after death

For married couples, Option A usually means the surviving spouse must rely on Social Security or savings and investments if the pension holder dies first.

Option B: Reduced Pension with remaining annuity balance

Massachusetts Pension Option B provides a slightly lower monthly pension — typically about 1–5% less than Option A.

If the retiree dies, any remaining balance of their annuity account (their employee contributions plus interest not yet paid out) is paid to the beneficiary as a lump sum.

Option B does not provide a lifetime pension to a surviving spouse. Over time, the annuity balance usually declines as pension payments are made.

Because of this, Option B is often misunderstood and may not provide the level of survivor protection many families expect.

Option C: Joint and Survivor Pension Protection

Massachusetts Pension Option C is designed to protect a surviving spouse or beneficiary.

Under Option C:

• The retiree receives a lower monthly pension while alive

• After death, the surviving spouse typically receives about two-thirds of the pension payment for life

• In many cases, if the spouse dies first, the pension can increase back to the higher Option A amount

For many married couples, Option C simply reflects how they already think about finances as shared income that needs to continue for whoever lives longer.

Why Most Massachusetts Retirees Focus on Protecting Their Spouse

Most retirement conversations sound less like financial theory and more like real life:

• “Will my spouse be okay if I die first?”

• “Will they feel secure?”

• “Will they be forced to make difficult financial decisions right away?”

Because of this, many retirees are willing to accept a slightly lower pension today in exchange for certainty and stability for their spouse later.

Choosing Option C isn’t pessimistic. It’s often a practical way to reduce risk and provide peace of mind.

Why the Highest Monthly Pension Isn’t Always the Best Choice

On paper, Option A almost always produces the highest monthly income.

But retirement happens in real households with:

• Shared expenses

• Taxes

• Social Security claiming decisions

• Longevity uncertainty

• 
  

A higher pension today can come at the cost of:

• Lost income for a surviving spouse

• Greater reliance on savings

• Less flexibility with Social Security timing

A better question than “Which option pays the most?” is:

Which Massachusetts pension option best supports our household if one of us dies?

How Social Security Affects Your Massachusetts Pension Decision

Pension option decisions should never be made without considering Social Security.

With changes to WEP and GPO, many Massachusetts retirees may now:

• Receive higher Social Security benefits

• Qualify for spousal or survivor benefits

• Have more flexibility in when to claim

• 
  

A spouse with strong Social Security benefits may rely less on pension survivor income. A spouse with limited or delayed Social Security may depend heavily on the pension continuing after death.

That’s why Massachusetts pension options and Social Security claiming strategies should be evaluated together, not separately.

Questions to Ask Before Choosing Option A, B, or C

Before finalizing a Massachusetts pension option, consider asking:

• If I die first, how will my spouse replace this income?

• How much guaranteed household income will remain?

• Are we prioritizing higher income now or more certainty later?

• How does this decision interact with Social Security timing?

• How comfortable are we relying on savings for survivor income?

There’s no single “right” option — but there is a right option for each household.

A Simple Example

Consider a married couple nearing retirement:

• One spouse has a Massachusetts public pension

• The other plans to delay Social Security

• Household expenses are steady

  
  

Option A may provide higher income early. But if the pension holder dies first, the surviving spouse could face an income gap until Social Security begins.

Option C may reduce income slightly today but provide more predictable income later.

The better option depends on goals, not just numbers.

This Is a One-Time, Irreversible Decision

Choosing between Massachusetts Pension Options A, B, and C is:

• A one-time election

• Irreversible

• Closely tied to Social Security, taxes, and household planning

That’s why this decision deserves thoughtful consideration, not a rushed choice based on a single number.

Final Thought

Your Massachusetts pension is a powerful foundation. The option you choose determines how that foundation supports your household over time.

If you want help evaluating Massachusetts Pension Options A, B, and C in the context of your full retirement picture, you can schedule a Roadmap Call to talk it through.

Disclaimer: Any attachments are for informational purposes only. Investing involves risk. Principal loss is possible. Past performance is no guarantee of future success. It should not be assumed that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance discussed herein. Different funds will have different fees and expenses. An investor should consider the investment objectives, risks, charges, and expenses of a fund carefully before investing. The highest applicable fee GWA may charge is 1.5%.

Investment advisory services offered through Guardian Wealth Advisors D/B/A Finance Roadmap Planning, an investment advisor registered with the Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about GWA’s investment advisory services can be found in its Form ADV Part 2 or Form CRS, which is available upon request. "This is not meant to be financial or tax advice. You should always consult with your tax professional with regard to specific tax questions and obligations.GWA-26-09